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Jun 27, 2011

A Carbon Tax WILL be a Part of Your Life SOON

Very interesting article from Bloomberg.com on Australia's wrestle with a recognition that carbon pollution is a part of what humans do to themselves and the Earth.

Significant recognition via a carbon TAX-ok we said TAX-must come soon and it will totally alter manufacturing as we know it today. The brilliant companies will not complain but accommodate and thus see it as a way to beat their competitors and prosper.

Australia Will Compensate 90% of Homes for Carbon, Gillard Says

June 27 (Bloomberg) -- Australian Prime Minister Julia Gillard said her government will pay compensation to nine out of 10 households to help families absorb the cost of a carbon- emissions trading system.

The government will offset entirely for the “vast majority of people” the cost of a carbon price through tax cuts, extra payments to couples with children, and increased pensions, Gillard said yesterday in an interview on the Ten Network. The assistance will go to about 7 million Australians, she said.

Gillard is seeking to garner support for an emissions trading system in the world’s biggest coal exporter, where the number of Australians who say the nation should take action has slipped to a record low 41 percent, according to a poll published today.

To pass the plan through parliament, Gillard needs the agreement of independent lawmakers and the Greens Party, whose leader Bob Brown said yesterday there are “still one or two major hurdles” to clear before a deal is reached.

That may take “weeks, rather than days,” Brown said on the Australian Broadcasting Corp.’s “Insiders” program. He also said Gillard “is a very good negotiator and I’m -- like her and the independents -- approaching this with a positive spirit. We’re not there yet, but we’re working toward it.”

A report is scheduled by month’s end from the Multiparty Climate Change Committee of lawmakers on proposed legislation to go to parliament in the next three months.

Big Polluters

The group, which the main opposition Liberal-National coalition has declined to join, will work out a fixed price per ton of carbon in an emissions system that would move to open trading as early as 2015. Also to be decided is aid to businesses and consumers to offset the impact.

“I want to tackle climate change by putting a price on carbon pollution that big polluters will pay and then use that money to assist Australian families,” Gillard said yesterday.

While the government hasn’t detailed a carbon price, a charge of A$20 ($21) a metric ton would cost households A$550 a year, or A$10 a week, the Sunday Telegraph reported yesterday.

A carbon price makes “goods and services that generate more pollution relatively more expensive, and those that generate less pollution relatively cheaper,” Treasurer Wayne Swan said in his weekly economic note yesterday. Consumers can either use the government compensation to buy the more costly goods, or save some of the money by choosing low-carbon items, he said.

Power Bills

Some 39 percent of Australians polled by the Lowy Institute between March 30 and April 14 said they aren’t prepared to pay anything extra on their electricity bills to help solve climate change. The poll also showed 62 percent were against Australia building nuclear-power plants to cut emissions.

Opposition Liberal-National coalition leader Tony Abbott, who has said he will repeal the plan if he wins government, pledged June 25 to deliver voters tax cuts without a levy on carbon.

Gillard’s government, formed after last year’s closest election result in 70 years with the support of three independents, is under pressure to deliver a carbon system. The Greens, who have one member in the lower house, will have the control of upper house Senate votes beginning in July, when new members take their seats.

Opponents of the carbon plan include the Minerals Council of Australia, which says it would destroy 126,000 jobs and threaten company investment. It would be the world’s third emissions-trading system after the European Union and New Zealand.

Earnings Threat

Coal & Allied Industries Ltd., a unit of Rio Tinto Group, and Whitehaven Coal Ltd. may see earnings fall by as much as 10 percent should a carbon tax be put in place, Citigroup Inc. analysts led by Elaine Prior said in a June 16 research note.

The Australian Coal Association says 18 coal mines may close in the next decade if the system is introduced and that it will be harder to attract investment. Anglo American Plc, the third-largest producer of steelmaking coal, said it will struggle with a $4 billion Australian expansion because the climate plan would slash its investments there by 45 percent.

In defense of industry they must plan out often 5-10 years into the future to do their capital budgeting and pay for their heavy equipment. If they are smart they will begin to add a 10% reserve for the cost of carbon pollution-gut it up in the short term and have larger profits in the long term with a system that helps us all. We congratulate Australia on these negotiations